Todd,
“The $2.7-billion acquisition will establish Manitowoc among the world’s top manufacturers of commercial foodservice equipment. Manitowoc said it is also is one of the world’s leading producers of cranes and innovative lifting solutions for the global construction industry.” (referring to Edonis).
————Side note: (the point is to illustrate that a lot of construction companies are going to break trends.. and are priced to do so, but some are strong — even still)
Breaking a long-running trend, Terex posted a decidedly disappointing third quarter. Net earnings slipped by 34% to $93.8 million, even as net sales increased almost 15% to more than $2.5 billion. The total backlog of pending equipment sales, a crucial forward indicator, fell 14% just since the second quarter. Backlogs for Terex’s aerial work platforms and construction equipment fell by more than 60% and 40%, respectively. In contrast, Terex reported an 8% increase in backlogged crane orders, and only a 9% drop in pending sales of mining equipment.
Bucyrus, meanwhile, enjoyed another knockout quarter with a 124% increase in net earnings, a 380-basis point expansion of EBITDA margin to 17.9%, and a whopping 74% increase in total sales backlog to $2.5 billion. The company’s entry into the underground mining equipment business with last year’s acquisition of DBT lends limited value to year-over-year comparisons, but nonetheless this was a rock-solid quarter for Bucyrus.
—————–End Side note:
My opinion is that Analysts still need to lower expectations for MTW, but I’m concluding that they’re waiting on earnings to come out before they do it. BUCY is another one of my favorites. TEX used to be, but I took it off the table when I compared TEX and MTW and figured MTW was better… not to mention a couple on campus interviews. You’d be surprised what company reps will tell you if they think you’re looking for a job with them and you ask them for the three things that they think their company can improve on and the most because you want to know if you can help.
My opinion on MTW could change if they come out with Q3 results and I see significant weakness. Remember that investors are dumb and 1-time costs generally hurt the stock price over the next year. That said, MTW could soar. Low risk situation if you ask me. I don’t see it getting whooped much more since it already took a beating when TEX came out weak.
Glen
From: Todd.Johns
Sent: Wednesday, October 22, 2008 3:56 PM
To: gbradfo
Subject: RE: MTW
Thanks Glen,
I believe that it is being punished without cause due to the overall market sell-off and especially in the small-cap segment. I like it for 3 reasons.
1. More tied to large government/energy infrastructure projects, not residential/commercial construction.
2. Diversified internationally, especially in some of the developing, high-growth, countries.
3. Good management and cost controls.
4. oh I forgot, they started in the crane business just short of the Great Depression…if they survived that, they can certainly make it through this economy